Memo to HP: Take Dell's Advice, Leverage Compaq's Brand

Sometimes a tongue-in-cheek comment can actually be a bright idea.

The VAR Guy

August 23, 2011

2 Min Read
Memo to HP: Take Dell's Advice, Leverage Compaq's Brand

HpCompaqLogo

Sometimes a tongue-in-cheek comment can actually be a bright idea. A case in point: When Hewlett-Packard last week announced plans to sell or spin-off its PC business, Michael Dell offered the following tweet: “If HP spins off their PC business….maybe they will call it Compaq?” The VAR Guy chuckled at first. But after a bit of thought our resident blogger realized HP should consider bringing back the old Compaq name. Either way, HP’s PC strategy going forward involves plenty of risks to HP’s printer and server businesses, and processor relationships. Here’s why.

HP has publicly stated that it could take 12 to 18 months before the company finalizes a potential sale or spin-off of the PC division. Inside HP’s executive offices it’s safe to assume at least two plans are being developed:

  1. Sell the HP Personal Systems Group (PSG) to a private equity firm or another technology company. The VAR Guy created a shortlist of potential suitors… but the list doesn’t look overwhelmingly positive so far.

  2. Spin-off the HP Personal Systems Group (PSG) as its own company — identifying exactly which HP people, processes, systems and infrastructure would be required for the HP PC business to stand as its own $40 billion empire.

Do We Own That Trademark?

Let’s say option 1 doesn’t pan out — perhaps because the bids are too low… or the bidders are too few. That sends HP to option 2 — spin off the HP PC organization as its own company. But you can’t call that spin-out HP PC Co. — can you? Certainly not.

In that case, it’s time for HP to dust off the old Compaq name. Surely all the trademarks and logo police are still in place, especially since HP has maintained some Compaq-branded hardware over the years.

Challenges Ahead

Regardless of the outcome, HP’s PC business is going to face some serious challenges ahead. Chief among them:

  • Enterprises and SMBs often make bulk network purchases — PCs, servers, printers. Pulling HP’s PC efforts out into a separate organization could hurt those integrated sales.

  • HP potentially negotiates volume discounts on processors — across mobile, desktop and server systems. De-coupling those desktop and server processor purchases could potentially make life complex for HP and a separate PC company. (Still, Lenovo successfully navigated that challenge when it acquired IBM’s PC business but not IBM’s x86 server business.

Still, let’s not press the panic button. HP’s R&D efforts continue within its PC organization. And HP has vowed to remain loyal to SMB partners and customers — though The VAR Guy does expect some SMB partners to hit turbulence as customers continually ask about the state of HP’s PC business…

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